Bid activity looked likely to keep London shares buoyant on Monday following last week's move on miner Rio Tinto, and Microsoft's offer for Yahoo in the US.
Matt Buckland, trader at CMC Markets, forecast the FTSE 100 to open about 30 points higher, after gains on Wall Street on Friday helped boost Asian stocks. Shortly before the close in Tokyo, the Nikkei 225 Average was up 2.7 per cent.
Miners were seen as driving the early gains after China's state-owned aluminium producer Chinalco, together with Alcoa of the US, bought a $14bn stake in Rio Tinto on Friday.
The move cast confusion on BHP Billiton (NYSE:BHP)'s $119bn bid for Rio. The UK Takeover Panel has given BHP until Wednesday to decide whether it would make a formal offer.
Meanwhile, Xstrata remained in the spotlight after China Development Bank was reported to have approached Glencore, the London-listed miner's biggest shareholder, with an offer for its 35 per cent stake.
This follows news that Vale, the world's second largest mining group, had fired Merrill Lynch as one of its advisers after the bank said it would not help finance a possible $90bn takeover of Xstrata.
Punch Taverns approached rival Mitchells & Butler with an all-share offer that could create Britain's biggest pub group with a combined value of more than £9bn, including debt.
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